Stop the bleeding: act within the first 24 hours

When your checking account goes negative, your bank will charge you an overdraft fee — usually $25 to $35 per transaction that pushed you over — and may charge another fee each day the account stays negative. The first thing to do is deposit money to bring the account back above zero. Every hour you wait, another transaction might post and trigger another fee.

Log into your bank's app or website right now and check your current balance, not the balance from this morning. Banks post transactions throughout the day, and a charge you made at 9 a.m. might not show up until 2 p.m. Look at pending transactions too — these are charges that have been authorized but not yet deducted. If you see more pending charges coming, you know more overdraft fees are likely on the way.

If you do not have money to deposit immediately, call your bank's customer service line. Tell them your account is overdrawn and ask what the current balance is, including all pending charges. Ask them specifically: "How many overdraft fees have been charged so far, and how many more transactions are pending?" This tells you the full damage before it gets worse.

Key Takeaways

  • Deposit money to bring your account positive within 24 hours, because each day negative can trigger additional daily fees.
  • Check pending transactions in your app, because charges that have not posted yet will still trigger overdraft fees.
  • Call your bank and ask them to reverse overdraft fees if this is your first time or if the fee seems unreasonable — many banks will remove one or two.
  • Set up low-balance alerts on your phone so you know before you overdraft, not after.
  • If you overdraft regularly, ask your bank about linking a savings account or credit card for overdraft protection.

Request a fee reversal from your bank

Most banks will reverse one or two overdraft fees if you ask, especially if you have been a customer for a while or if this is your first overdraft. The worst they can say is no. Call the customer service number on the back of your card and say: "I overdrafted my account. I have deposited money to bring it positive. Can you reverse the overdraft fees?"

Be direct and do not over-explain. Banks hear thousands of these calls. If the representative says they cannot reverse the fee, ask to speak to a supervisor or manager. Supervisors have more authority to reverse fees than front-line representatives do. If you have been with the bank for years without overdrafting, mention that. If the overdraft happened because of a timing issue — a paycheck that was supposed to post but did not, or a charge that posted earlier than expected — mention that too.

If the bank refuses to reverse the fees, ask them to send you a written explanation. Some banks will reverse fees if you follow up in writing or through their app. Document the date you called, the name of the representative, and what they said. If you plan to dispute the fees later, you will need this record.

Understand what happens to your credit score

An overdraft by itself does not show up on your credit report. Your bank will not report it to the three credit bureaus — Equifax, Experian, and TransUnion — just because your account went negative. Your credit score will not drop because of the overdraft.

However, if your bank sends your account to a collection agency because you do not pay the negative balance, that collection account will appear on your credit report and will damage your score. This usually happens only if you ignore the overdraft for months. If you deposit money to bring the account positive within a few weeks, this will not happen.

If your bank closes your account because of the overdraft, that closure will not appear on your credit report either. But it will appear in ChexSystems, which is a banking history report that other banks check when you try to open a new account. Some banks will not open an account for you if you have a recent closure due to overdraft or unpaid negative balance.

Set up alerts and overdraft protection to prevent the next one

Most banks offer low-balance alerts for free. You can set an alert to notify you by text or email when your balance drops below a certain amount — say, $200. This gives you time to transfer money in before you overdraft. Log into your bank's app or website and look for "alerts" or "notifications" in the settings menu. Set the threshold to whatever amount would give you a cushion.

Ask your bank about overdraft protection. This usually means linking a savings account or credit card to your checking account. If you overdraft, the bank will automatically transfer money from the linked account to cover the negative balance. Some banks charge a small fee for this transfer — usually $10 to $15 — but it is cheaper than an overdraft fee. Some banks offer it for free.

If you do not have a savings account or credit card to link, ask about a line of credit. Some banks offer overdraft lines of credit that work like a small loan: if you overdraft, the bank covers it from the line of credit, and you pay interest on what you borrowed. This is cheaper than overdraft fees if you overdraft often, but it costs more if you overdraft rarely.

Dispute the overdraft if the bank made an error

If you believe the overdraft happened because the bank made a mistake — a charge posted twice, a deposit did not post when it should have, or a transaction was authorized without your permission — you can dispute it. Call your bank and explain what happened. Ask them to investigate the transaction.

If the bank agrees the error was theirs, they will reverse the overdraft fee and any charges that resulted from it. If they disagree, ask them to send you a written explanation of their findings. Keep this letter. If you want to escalate the dispute, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov. The CFPB investigates complaints against banks and can order them to refund fees if they find the bank was wrong.

Disputes take time — usually 10 to 30 days for the bank to investigate. During this time, your account may still be negative. If you can, deposit money to bring it positive while the dispute is pending. Once the bank resolves the dispute in your favor, they will refund the fees.

Know when to close the account and move to a different bank

If you overdraft frequently and your bank refuses to reverse fees or offer overdraft protection, it may be time to switch banks. Some banks are more lenient with overdraft fees than others. Online banks and credit unions often have lower overdraft fees or no overdraft fees at all.

Before you close the account, make sure you have paid the negative balance. If you close an account while it is negative, the bank will pursue you for the debt. They may send it to a collection agency, which will report it to the credit bureaus.

When you open a new account, tell the bank upfront that you want overdraft protection or that you want overdraft fees waived. Some banks will negotiate this, especially if you are opening a new account with direct deposit. Ask about their overdraft policy before you open the account, not after you overdraft.

Frequently Asked Questions

How long does an overdraft stay on my record?

An overdraft does not stay on your credit report at all — it only affects your credit if it goes to a collection agency. In ChexSystems, an overdraft or account closure typically stays for five years. After that, it will not show up when banks check your history.

Can my bank freeze my account if I overdraft?

Yes. If your account goes negative and stays negative for a long time, your bank can freeze it to prevent more transactions from posting. They can also close the account entirely. This usually happens after 30 to 60 days of a negative balance, but it varies by bank.

What if I overdraft and then more charges post before I deposit money?

Each charge that posts while your account is negative will trigger its own overdraft fee. If you overdraft by $50 and then three more charges post, you will owe $50 plus three overdraft fees (usually $75 to $105 total). This is why depositing money immediately matters — it stops the cascade of fees.

Do I have to pay overdraft fees if I dispute the original charge?

Not if the bank agrees the original charge was unauthorized or fraudulent. If you dispute a charge and the bank finds in your favor, they will reverse the charge and any overdraft fees that resulted from it. If the bank finds against you, you still owe the overdraft fee.

Can I negotiate overdraft fees with my bank?

Yes. Call and ask. Banks reverse fees regularly for customers who ask politely and have a reasonable history with the bank. Supervisors have more authority to negotiate than front-line representatives, so ask to speak to a manager if the first representative says no.